The cloud—whether public, private or hybrid—is here to stay. So how can you take advantage of its benefits while dealing with its challenges?

It seems that no matter where I go these days, everyone is talking about the cloud. Even my fellow commuters on the Long Island Rail Road have something to say—or something to ask—about this latest tech phenomenon. So I wasn’t at all surprised when cloud computing popped up throughout the day at the MIT Sloan CIO Symposium, held in Boston in May. The CEO panelists at the keynote address, “Opportunities and Strategies in the Digital Business World,” spoke about the cloud as a way to free up capital so companies could take advantage of new business opportunities.

One of the panelists, David Castellani, CEO of New York Life Retirement Plan Services, advised companies to figure out how much noncore infrastructure they can outsource. “How much of it do you really need to exist internally” he asked. “You need capital to try new things, and you need to free up human resources as well.” He said many businesses can “throw out most proprietary apps that don’t add business value.”

In another session, panelists discussed cloud computing and mobility. Lior Netzer, vice president of mobile network strategy at Akamai, predicted that in a few years, mobility will exist in the cloud. As a result, the type of mobile devices individuals use won’t matter because all their data will be in the cloud, enabling them to continue working on one document or project with multiple devices. Netzer called it “seamless mobility.”

Panelists at a session on cyber-security viewed a different aspect of cloud computing: the challenges of securing it.
This is obviously a major hurdle for many organizations, but it’s not an insurmountable one, as there are many security solutions available today—and more are in the pipeline.

“We all have some legacy systems that will be around for awhile,” said David Saul, senior vice president at State Street, “but we should eventually move to a cloud model that’s got security built in from the ground up.”

Many networking conversations also revolved around the cloud. In one meeting, Shawn Banerji, a managing director at Russell Reynolds Associates, pointed out a key strategic advantage of the cloud: changing the business model.

“CIOs need to choose technologies that can help change the business model and achieve the business outcome,” he said. “They can participate in creating the future of their company by managing critical assets and providing actionable information to the business through a cloud model. CIOs need to be BIOs: business information officers.”

You, Baseline’s readers, also had a lot to say about cloud computing when you participated in our recent research study. You enthused about the cloud’s versatility, speed and cost savings, while lamenting the security and control issues involved with multitenancy. (See “Speeding to the Cloud” on page 18.)

One critical element of cloud strategy revealed by the survey involves service levels: “Survey respondents hold very low opinions of the service-level agreements they are getting from vendors,” wrote Guy Currier, our executive director of research. “That’s why we believe that the first essential-but-unknown success factor in cloud implementations is a strong focus on SLAs.”

Another essential, and more positive, element, according to our respondents, is integration. “Cloud computing schemes … are oriented from the ground up toward integration with existing architectures,” Guy wrote. “So you can splice together multiple cloud and non-cloud offerings to create your own custom suites.”

Though many organizations are still holding back—fearful of lost data or lost control—a growing number of enterprises are driving their business to the cloud. We interviewed several for our cover story: Kelly Services, Lionsgate Entertainment, HarperCollins Publishers, GWR Medical, Imperial Sugar, WhitePages, Suncorp and Dubset.

These and thousands of other organizations are taking advantage of one or more of the cloud’s offerings: software as a service, platform as a service and infrastructure as a service. Many are starting with a private cloud, then using a public cloud for functions that are not critical to the business.

Regardless of the type of cloud initiative you’re considering—private, public or hybrid—the key to success is a well-thought-out strategy that’s based on your company’s business objectives.